As part of Making Tax Digital, income and expenses must be submitted to HMRC 4 times each year using HMRC recognised software. Logging your receipts every quarter (rather than once a year) will help avoid the last-minute scramble for missing receipts!
Whilst you’ll still only need to pay your personal tax bill once every year (and any payments on account by 31st July), sole traders and landlords will have ongoing visibility of their potential tax bill – meaning there are no nasty surprises at the year end! Understanding what your tax bill is likely to be allows for better planning and budgeting during the year to ensure you’re prepared when the final payment needs to be made.
Rather than waiting until the end of the tax year to review the health of your business over the last 12 months the changes coming with Making Tax Digital will provide a much clearer and up-to-date view of your finances. Submission of records to HMRC once every quarter will allow those who are self employed, sole traders or landlords to make more informed decisions based on reliable data. With data stored in The Cloud you’ll be able to access this information anywhere – anytime.
By standardising the format of tax submissions using HMRC recognised software the risk of human error will be significantly reduced compared to manual record-keeping.
With more accurate record keeping HMRC hopes to reduce the number of penalties charged to business owners for errors and non-compliance.
Keeping financial records accurate and up to date makes it easier for businesses and individuals to secure funding when needed. Lenders, investors, and financial institutions increasingly favour businesses that can demonstrate financial health through transparent, current accounts.
With Making Tax Digital (MTD), you’ll have access to real-time financial data to support loan applications, investment opportunities or even mortgage approvals. Empowering you to grow your business or even invest in a new home for your family.
In an increasingly digital economy adopting MTD early (and not just complying with mandatory requirements) will help your business be better prepared for future technological development.
Our friendly and helpful approach to accountancy, ensures that you understand and are in tune with your finances. Our committed team will communicate with you every step of the way so that you understand the position of your financial affairs – get in touch today.
